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Identity theft: Should you worry?

By Rubina Ahmed-HaqSpecial to The Star

Sun., April 8, 2012

While the experts would have you believe that identity theft is a growing problem, the chance of losing money to this type of consumer fraud is actually fairly small. But while the dollar amount of losses and number of people it affects may not be big, if it does happen to you it can be a mess to untangle.

Identity theft is a broad term that includes things ranging from a credit or debit card being compromised to a more severe problem like real estate title fraud, when a thief mortgages your property and disappears with the money. The Canadian Anti-Fraud Centre says about 18,500 Canadians were victims of identity theft in 2010, the latest year complete figures are available for. They lost a collective $9.4 million, or about $510 a person. In many cases banks and other lenders absorbed the losses when their customers were victimized.

Toronto actor Daniel Stolfi was the victim of identity theft when he used his credit card to give to a charity at Christmas. (CARLOS OSORIO / TORONTO STAR)

Identity theft comes in many forms. (Shutterstock)

The Royal Canadian Mounted Police, Ontario Provincial Police and Competition Bureau Canada jointly manage the CAFC. The agency says that the most likely targets of identity theft are between 50 and 59 and the victims are often duped into giving the information that leads to the fraud. One common scam is through phone calls and emails that claim you’ve won a prize and they need your personal information to release it.

Toronto actor Daniel Stolfi knows what it feels like to be a victim of identity theft. Two years ago, his credit card information was stolen after he made a donation to his favourite charity online at Christmas.

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It took a while to catch up to the scam. When he sat down to review his credit card statement he found several fake charges, including a $1,000 charge to a jewellery store in Australia. Once TD Visa established Stolfi did not make the charges they were reversed.

“They asked me some questions and right away saw that I wasn’t in Australia.” Stolfi says about his call to TD Visa. “They knew it was fraud and said they would refund the money.”

Last February, Oakville bookkeeper Laurie Parkhill’s credit card information was skimmed. She suspects it was when she bought gas at a station she doesn’t normally use. Parkhill noticed a $775 charge for tires from a store in Calgary.

“I’ve never even been to Calgary so something was wrong,” she says.

She called the store where the charge was made and quickly figured out the fraud. The scammer had used her information to create a fake driver’s licence and credit card.

“The store told me the card didn’t work when they swiped it, but they verified the name with a driver’s licence and it matched,” Parkhill said. The store manually put the transaction through because the licence and card seemed to match.

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Parkhill called her credit card company and the card was cancelled.

Like Stolfi, Parkhill was lucky the matter was dealt with quickly and with no financial consequence, because after a quick investigation the banks concluded she did not make the charges.

But both victims say the experience has left them feeling violated and insecure. Parkhill now does an annual credit check. Stofli doesn’t buy anything online unless he trusts the website 100 per cent.

One of the least common crimes associated with identity theft is real estate title fraud. But if it does happen the impact can be huge and difficult to unravel, says Raymond Leclair a real estate lawyer at LawPro. The average amount stolen in title fraud is in the range of $300,000 compared to credit card fraud, where it is $1,200.

Here’s how it might work: The criminal targets a house and by stealing mail is able to build a financial profile with bank accounts, bills and credit and mortgage information. With that forged identity the criminal walks into a bank and asks to take out a second mortgage secured by the home. The fake identification is verified and since the house title is in the correct name, the banks are less likely to ask questions.

The bank offers the money in the form of a line of credit that can be used with a bank card or by writing cheques.

In most cases the legitimate homeowner does not find out what has happened until the loan statements show up in their mailbox. Now they are left with the task of proving that they were victims of identity theft and did not borrow any money. Banks are often sympathetic to victims of title fraud, but like credit card fraud they conduct their own investigation to figure out what happened. In the case of real estate fraud it can take years.

In the end, the matter is often sorted out, but in the process victims can face legal bills, banking issues and ruined credit history. Also, the perpetrators of title fraud are often never caught.

Homeowners can get title insurance to guard their property. This insurance policy provides owners protection against losses or damages suffered as a result of title problems, including title theft and fraud.

First Canadian Title has been offering title insurance since 1991. FTC vice-president Susan Leslie says the volume of identity theft claims at the company is low but the dollar value of each is high. Of all the complaints they get, only one per cent are deemed cases of identity fraud, but the crime represents 12 per cent of the claims paid by FCT, she said.

For a home valued at $450,000 in Ontario, title insurance would be a one-time fee of $432.

The RCMP suggests that Canadians should get into the habit of checking their credit report annually with credit bureaus like Equifax or Trans Union. This helps detect if there has been any fraudulent activity using your name. Often fraudsters will wait many years to see if they can get away with something big by making small transactions with your identity.

“Don’t wait until it’s too late, be proactive and stay on top of all the activity that takes place under you name,” says Sgt. Luce Normadin, the RCMP’s national identity fraud coordinator.

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